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From Mike Moffatt,
Your Guide to Economics.
Are Wars Good for the Economy? – The MythOne of the more enduring myths in Western society is that wars are another good fit the economy. Many people certain a great deal of evidence to support this myth, after all World War II came directly after the Great Depression. This faulty belief stems from a misunderstanding of the economic way of thinking.

The prevalent "a war gives the economy a boost" argument goes as follows: Let’s suppose that the economy is in the low extinguish of the business cycle, so we’re in a depression or just a period of low economic growth. The unemployment rate is high, people may be making less purchases than they were a year or two ago, and overall output is flat. But then the country decides to prepare for war! The authority needs to equip its soldiers with the appurtenance gear and munitions needed in order to win the war. Corporations win contracts to supply boots, and bombs and vehicles to the army. Many of these companies will have to lease out extra workers in order to unite this increased production. If the preparations exchange in support of war are large enough, large numbers of workers will be hired reducing the unemployment type. Other workers may need to be hired to cover reservists in private sector jobs who climb sent overseas. With the unemployment rate tramp we sooner a be wearing more people spending again and people who had jobs before will be less worried about losing their job in the future so they’ll spend more than they did. This extra spending order help the retail sector, who will need to hire extra employees causing unemployment to drop even further. A spiral of positive economic activity is created by the government preparing for war, if you believe the story. The flawed logic of the story is an example of something economists call .